Corona billions that nobody wants

Brussels.At every EU summit, the heads of state and government describe in bright colors how terribly the virus has hit their own economy. The aids provided are only touched upon to a small extent.

In order to deal with the damage, the Union’s finance ministers had already put together an initial aid package in the spring: 540 billion euros. A good six months later, a large part of this money is still lying around unused. Of the 240 billion euros in loans that the ESM rescue fund has made available in Luxembourg, none has been called. It is no different with the special programs of the European Investment Bank (EIB) over 210 billion euros. Only one program is running, but also hesitant at best: the European Commission had put together 100 billion euros for a European short-time work allowance.

Frowned upon loan

The 750 billion euro reconstruction fund, the disbursement of which has currently been stopped due to the vetoes from Hungary and Poland, could also remain unaffected. A survey in the government headquarters a few days ago showed that everyone is waiting for their share of the 390 billion euros that are given as donations, i.e. do not have to be repaid. There is practically no interest in the loans for the remaining 360 billion euros.

“Not all debts are the same,” said the financial expert of the Christian Democratic Group in the European Parliament, Markus Ferber (CSU), on Monday. It is true that loans backed by the EU Commission are significantly cheaper for the member states because the EU is considered to have a good credit rating on the financial market. But the fear of a return of the Troika is great.

During the sovereign debt crisis, the experts at the donors dictated to each government what reforms it had to do and when. The fear remained that “Brussels will look more critically at anyone who wants money,” said Ferber. Those who borrow money, on the other hand, “feel less closely observed”.

In addition, such national government debts can be sold to the European Central Bank after a grace period, which pays fresh money for it. In this situation, an interview with EU Parliament President David Sassoli sparked discussion. The Italian described a haircut for his homeland as “basically worth considering”. No wonder, Italy’s debt level had reached a new record in June at 149.5 percent of annual economic output.

© Mannheimer Morgen, Tuesday, November 24th, 2020

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